Kendal generic, c PNW

The amount of developable land in the North is far from ideal. Credit: PNW

The Subplot

The Subplot | Examining UK housing’s biggest enemy – land supply

Welcome to The Subplot, your regular slice of commentary on the business and property market from across the North of England and North Wales.


  • Give me land: the Competition and Markets Authority getting tough with housebuilders won’t change England’s supply problem
  • Elevator pitch: your weekly rundown of what is going up, and what is heading the other way

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Give me land, lots of land under starry skies above

The Competition and Markets Authority has its sights trained on residential developers. But there are big questions about land supply, too.

A Competition and Markets Authority investigation into our broken housing market. published on Monday, resulted in the decision to look more closely into 10 major housebuilders on the suspicion they had been colluding anti-competitively to keep delivery down, and thus prices up, in various localities. It also produced a 374-page reasoned analysis of the market, which is well worth your time.

The North is doing ok

If you get as far as page 169 you’ll find a table which shows how close local councils got to meeting their assessed need for housing over the three years 2019/2021. In Yorkshire, just one local council (out of 21) failed to hit 75% of its target in 2021. In the North East, it was also one (out of 12) – and in the North West three (out of 38). In 2021, the proportion of councils hitting 95%, within a whisker of meeting their targets, was 10/12, 17/21, and 30/38 respectively. That represented a real advance in Yorkshire and the North West, where several laggardly councils pulled their socks up.

Land rangers

But the real story is about land and the constraints on supply. For instance, the CMA notes that it’s relatively floody in Yorkshire, with 13% of all land subject to flood risk, making it among the most floodable regions in England. Moreover, the North is disproportionately hilly and beautiful, meaning much less land is available for development. Two-thirds of North West councils are hobbled by having too much beauty around them, meaning less than 30% of their land is potentially developable. See West Lancashire, South Ribble, Chorley, and Warrington in the North West; York, Doncaster, and Wakefield in Yorkshire.

The North is good at brownfield

Nearly 70% of housing development in the North West is on brownfield land, more than 60% in Yorkshire. The North East has one of the lowest figures for brownfield land (40%). The problem is that some parts of the North need to get considerably better. Ironically it is the most densely populated urban areas that need to improve, hence the government’s recently announced “brownfield presumption.” This would ease the path to permission for brownfield development if the locality had not met 95% of its housing target. Locations in this bracket include Bradford, Leeds, Liverpool, Manchester, Newcastle, and Sheffield. Consultation will run until 25 March.

You need friends

Three data releases from Savills make the point very nicely that resolving land supply problems could prove intractable. The first turns on the fact that the 20 largest cities account for 90% of the shortfall in housing need. On the face of it, not a surprise, because big cities have large and needy populations. The Top 20 aren’t actually doing badly, granting planning consent to about 28% more homes than they strictly need, and as a result getting housing delivery within reach of the target, merely 3% below what’s required. The trouble is that they’d need to approve even more (about 35%, not 28% extra) to fill the gap, and they’re also going to need help from neighbouring areas to make up the numbers.

Alas, Green Belt

Unfortunately, the neighbours aren’t being very helpful. The councils next door to the Top 20 are missing their own targets by a wider margin than the cities – by about 8% says Savills. Bury and Stockport in Greater Manchester, and most of West Yorkshire’s councils, are on the naughty step. They can’t entirely be blamed because of all that Green Belt.

For what it’s worth, greenfield land prices are falling, but brownfield land prices are falling faster. Savills says UK greenfield and urban land values fell by 0.8% and 1.3% in the final quarter of 2023, taking total annual falls to 6.5% and 8.4% respectively. Yes, the housebuilding scene is quieter but also yes, the cost of money is higher. So inevitably that means developers do not bid up prices with the abandon of recent years. The old wisdom is that land accounts for about one-third of the gross development value, so this slide in values could make a difference.

The future is already here

Have the seeds of a solution already been laid? The third tranche of Savills analysis suggests it might. Whilst home building fell in 2023, down 9% on 2022, there are signs of growth in two of the places you might hope to find it. The delivery of affordable housing is up sharply to reach a high point not seen since 2015. The volume of social-rented homes was up 26%, albeit from a small base. And build-to-rent completions rose by 57% taking the UK’s total stock ticking past 100,000 units. Starts weren’t so healthy, but the pipeline is well stocked and that may not make much difference.

Council housing: the missing piece of the jigsaw

Those social housing figures matter. If the housing sector is in crisis, this isn’t a crisis of the private sector’s making. Reviewing recent output by housebuilders, the CMA concludes: “It is worth noting that these recent levels of housebuilding are not out of line with what the market has produced over time… the only years in which housebuilding in England and Wales approached or exceeded 300,000 homes per year were during periods with significant levels of local authority housebuilding.” In other words, if policymakers think the market needs more or different stuff, the government needs to build it.


Going up, going down. This week’s movers

A bad week for big agency job prospects, perhaps a good week if the debt crisis has reached its high-water mark. Doors closing, going down.

Agency profits

Property consultancies are feeling the February chill, according to the latest data drops. JLL reported this week that its global income plunged by 64% in 2023, despite a modest uptick in the final quarter. Slow leasing activity cut fee income. It was reported early last year that there would be 300 UK redundancies among its roughly 3,000 UK workforce, so testing times. JLL never confirmed the numbers, and still won’t.

Knight Frank was also said to be mulling a significant number of job cuts. Reports in October 2023 suggested 3% of its UK workforce would go, meaning perhaps 90 jobs. Subplot asked for an update, but Knight Frank declined to comment.

Could there be more to come? Avison Young insists it is not in trouble after Standard & Poor, the credit reference agency, said on Monday that the Toronto-based group failed to make required quarterly principal and interest payments on its senior secured term loan. This is said to refer to $375m of debt accumulated in 2019 and 2022.

The latest unhappy news comes after Avison Young’s November 2023 decision to offer voluntary redundancy to UK staff. Time will tell whether voluntary redundancy turns into something tougher. Meanwhile, CBRE is also looking for cost savings.

Property is always first down, and first back up again. Folks, this is what recessions look like.

Loan defaults

The good news is that the volume of commercial property loans defaulting is about what everyone expected. The bad news is, that’s still enormous.

AEW, the real estate investment and asset manager, slipped out some numbers on Wednesday which will provide limited comfort.

AEW’s research estimates that 7.5% of the commercial property loans agreed in the UK and European mainland 2018/2021 have defaulted. That’s about £36bn of loans, amounting to £12bn of losses for lenders. This is about the same level of distress as the years immediately after the 2008 global financial crisis, AEW adds cheerily.

Lenders are offering about £77bn less debt than borrowers need to refinance their existing loans, says AEW. That in turn means about 16% of UK and mainland commercial real estate loans could be up the creek without a paddle. Bear in mind that about a fifth of loans now have 100% loan-to-value ratio; there is no borrower capital left, no wiggle room, perhaps no hope.

But don’t despair. UK real estate borrowing costs are forecast to reduce to 5% by year-end 2025. Given the positive spread between prime yields and debt costs, AEW expects lenders to be expanding their loan books in the UK by the end of this year. “This is sooner than previously expected and should allow investors to become more active,” the firm said. Fingers crossed that’s right.

Get in touch with David Thame:

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I could rant about common errors amongst journalists that end up spreading to the general discussion around these matters, but I won’t. Instead, I’d just ask that more care is taken in conflating housing ‘need’ and ‘targets’, and ‘Green Belt’ and ‘greenfield’. In both cases, they are different things and it’s important to note and understand those differences. You are, otherwise, potentially talking about apples when you really should be talking about pears.

By Unlevelled for balance

As the article notes, the only time we’ve ever exceeded the 300,000 homes a year target – the only time we’ve ever come anywhere near meeting housing need – has been when the public sector has done a significant part of the building. The CMA report highlights what has long been apparent to anyone involved in housebuilding which is that it simply isn’t in the interests of financially driven private companies to meet needs. This is not an issue that will be solved to any significant degree by local authorities acting in isolation – it needs legislative intervention and finance from central government, on a scale not seen, funnily enough, since the last time we exceeded the 300,000 homes per year mark…

By and by

A wide generalisation but a key issue facing the deliverability or viability of development brownfield sites is the cost of remediation (financial and time cost).

It’s not surprising that delivery on formerly unviable/problematic sites was made possible by funding/support from schemes such as Housing Market Renewal Initiative and the Single Regeneration Budget.

It’s good to see Homes England often taking on unviable sites and remediating them, sometimes with outline permission, for a housebuilder/developer to take on and so this reach being widened, which shows that appropriately targeted central government spending can successfully aid housing delivery.

Despite ongoing austerity – speak to councils who will tell you it hasn’t stopped – this is an area where true benefits could be achieved if only central government put the money into it.

By JohnMac

If only Lab and the Cons hadn’t let in 10 million people since 1997, we would have cheap accommodation for everyone.


I doubt there is collusion from the housebuilders and if anything there is more competition due to the inherent demand for housing and a rapidly rising population and lack of land supply. It takes an inordinate amount of time, cost and risk in pursuing planning, limiting new entrants thereby reducing choice but that’s not at the door of the housebuilders.

By Max Homes

Hi ya By and By, So 300,000 homes could be built every year, solving “the housing problem”, but that without making bigger-than- otherwise profits and bonuses for a relative few. So, logically, not solving the “housing problem” is in best interest of that few. But as public community investment is bad and only private investment is good, there will always be a housing shortage because that means bigger profit margins. Sit on building land and the price of land and houses rises. Use that land to build lots of houses and the price of houses falls. The more houses you build the less profit you make per pound invested. Supply and Demand.

By Adam Smith

JM – UK birthrates are declining. We would have a declining population like many mainland European countries if it wasn’t for immigrants. They also pay a huge amount of tax, so you’d have to wave goodbye to that as well without them.

By Anonymous

JM, and we wouldn’t have enough workers in the NHS, care system or players and managers to create the best football club teams in the world!

By Anonymous

Every government period vested interests in the housing industry tells government to make it easier to build (any old rubbish) anywhere, and that the changes will solve the housing shortage.

Every government period the government lets them have their way.

Surprisingly nothing improves. It’s almost as if the only motive is simply more profit… would it be churlish to point out that a housing crisis is good for these peoples’ profits, and to question their motivation therefore to solve it?

By Jeff

@ Adam Smith. Yes. It’s as if realising a profit motive isn’t always the best thing for achieving a social good.
PS – I’ve read your books; well written but a lot I don’t agree with. Got to say, in the nicest way possible, that I’m a little surprised you’re still with us.

By and by

Unlevelled for balance, Feb 29th – absolutely right. An entire chunk of this was going to be about the consistent failure to understand that need is a measure of presumed social requirement (e.g. you might be judged to “need” housing even if you personally don’t consider that you do). It’s a utopian vision, a view of how the world ought to be. Demand, on the other hand, measures who is actually prepared to pay for something, is a fact of now, of the real world, of the market. The two have no obvious relationship at any point, ever. Alas need is too often assumed to be demand, leading to the kind of mess we’re currently in. That section got cut – too long! But you’re quite right to flag.

By David Thame

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